Australia and Japan Sign “Historic” Economic Agreement

After seven years of negotiations, Japan and Australia finally shook hands on an economic partnership agreement that would pave the way for broader free trade between the two nations.

The landmark Australian-Japanese deal, forged during a summit in Tokyo between Japanese Prime Minister Shinzo Abe and Australian Prime Minister Tony Abbott, will see the two nations lower tariffs on imports of key products.

Japan has agreed to lower duties on Australian beef to 19.5 percent over 18 years—half that of the current levies of 38.5 percent. The duty-free quota on cheese—Australia’s biggest dairy export to Japan—will be boosted from 27,000 tons per year to 47 tons annually.

Australia will immediately remove the 5 percent tariff on imported Japanese cars with engines of 1,500 to 3,000 cc displacement. Tariffs on other Japanese-made cars will be reduced to zero over the next approximately 3 years.

Australia will also eliminate its tariffs on Japanese auto parts in 5 years.

The visiting Australian leader lauded the deal as a “historic” one that will improve prosperity for both nations.

“This is the first time that Japan has negotiated a comprehensive economic partnership agreement or free trade agreement with a major economy, particularly a major economy with a strong agricultural sector,” Abbott said.

Abe hailed Australia as a “strategic partner” that shared “universal values” with Japan.

“In today’s meeting, I have confirmed with Mr. Abbott that we will elevate this strong bilateral relationship between our two countries to a new special relationship, so that we can work on forging an even stronger partnership together,” he said.

The deal is expected to be formally signed when Abe visits Canberra in July and will come into effect later this year.

The landmark agreement between the two countries comes as officials push for the Trans-Pacific Partnership (TPP), an ambitious 12-nation free trade partnership led by the US.